NSE to start MF trade with NSDL only

ET Bureau|

Nov 27, 2009, 04.40 AM IST

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KOLKATA: National Stock Exchange (NSE) has registered only NSDL for the New Mutual Fund Service System (MFSS) that is supposed to start from November 30. The move would result in over 65 lakh depository account holders being unable to trade in mutual funds on the country's largest bourse.

A circular issued by NSE says that depository settlement would be available only for DP account holders in National Securities Depository Ltd. (NSDL). NSE members feel the exclusion of CDSL would hurt the interests of a large section of investors.

While NSDL is the biggest depository in the country with more than one crore accounts, CDSL is the second-biggest. Trading in mutual funds at National Stock Exchange would start with schemes of UTI AMC, followed by that of Birla Sunlife MF. Currently, UTI AMC has assets under management of Rs 76,847 crore and an investor base of over one crore. Birla Sunlife has an AUM of more than Rs 64,000 crore.

As per the new system, all mutual fund schemes, except liquid funds, can be traded electronically on the NSE platform.